Laboratorios Indas grows pharmacy sales by 37 percent

Using IBM predictive analytics to analyse customer demand patterns and optimise sales processes

Published on 06-Jun-2011

"Our new analytical capabilities have revolutionised our marketing research process. We now have a far greater understanding of our existing and prospective clients, which gives us a tremendous edge over our competitors." - Roberto García Fernández, Data Mining & Market Research Manager in the Business Intelligence Department at Laboratorios Indas

Customer:
Laboratorios Indas

Industry:
Consumer Products

Deployment country:
Spain

Solution:
BA - Business Analytics, BA - Business Intelligence, Optimizing IT, Smarter Planet

Smarter Planet:
Smarter Manufacturing

Overview

Laboratorios Indas is the largest manufacturer of sanitary and hygiene products in Spain. Headquartered in Madrid, the company distributes its products through retail channels such as pharmacies, hypermarkets and supermarkets, as well as hospitals throughout the country.

Business need:
The company’s existing method of collating sales data was neither reliable nor user-friendly, and the inability of sales teams to share client information prevented analysis of customer behaviour, which limited potential sales revenue.

Solution:
Laboratorios Indas has implemented a business intelligence solution that provides precise intelligence on where and how sales efforts should be focused in order to maximize profitability.The company now integrates and analyzes large quantities of sales data captured and uploaded via sales reps’ PDAs, together with demographic data to build sophisticated statistical models that provide deep insights into likely sales patterns, at the individual product level, for pharmacies in different locations.

Results:
Increased average sales per pharmacy by 37 percent over the prior year. Reduced the average time it takes sales reps to compile sales data from store visits by 92 percent, from five minutes to 25 seconds.

Benefits:
Began generating commercial benefits just four months after implementation by providing insights into the likely product demand patterns for individual pharmacies. Enabled the company to target key pharmacies more systematically with visits, emails and mailings to help drive sales.

Case Study

To read a Spanish version of this case study, please click here.

Instrumented
Captures all sales data and order history, plus client and customer demographics, in a central data warehouse for data mining.

Interconnected
Integrates sales information from PDAs in the field with population size, socioeconomic levels and number of pharmacies in the region, providing real-time predictive marketing support.

Intelligent
Increases sales per pharmacy by 37 percent by using statistical analysis to leverage real-time order history and local demand patterns. Reduces effort for sales teams while optimising sales visits, strengthening customer loyalty and expanding the business.
Laboratorios Indas is the largest manufacturer of sanitary and hygiene products in Spain. Headquartered in Madrid, the company distributes its products through retail channels such as pharmacies, hypermarkets and supermarkets, as well as hospitals throughout the country.

The challenge
“Understanding customer behaviour by region and turning it into actionable metrics is vital to maximising sales in the pharmaceutical channel,” comments Roberto García Fernández, Data Mining & Market Research Manager in the Business Intelligence Department at Laboratorios Indas. “In order to better understand customer behaviour, we needed to move away from error-prone manual entry of sales data into Excel spreadsheets.”

The company also needed to be able to extract massive amounts of sales information from its data warehouse system for in-depth statistical analysis. This would address its goal of launching targeted marketing campaigns and improving the cost-effectiveness of each sales visit.

The company’s existing method of collating sales data was neither reliable nor user-friendly, and the inability of sales teams to share client information prevented analysis of customer behaviour, which limited potential sales revenue. Because many of Laboratorios Indas’ most important retail clients are pharmacies, the company currently has approximately 65 sales representatives who visit some 14,000 pharmacies at least once a year to promote company products. Unifying and leveraging the data collected during these visits could provide sales teams with valuable insight into buying trends and customer demographics at every store location, both to better service clients and stay ahead of the competition.

The solution
Laboratorios Indas implemented a statistical analysis solution based on IBM SPSS Modeler. This allows the company’s data mining and market research teams to extract external and internal marketing data from the company’s data warehouse in real time, and unite and analyse both datasets simultaneously.
After each sales visit to a pharmacy, sales representatives upload customer information onto their PDAs, such as the quantity and type of products sold to the pharmacy. This data is then transferred to the company’s data warehouse. In addition to this internal data, the market research team mines external data. For example, information regarding the population size by age and gender, socioeconomic level and number of pharmacies in each postal code to create a detailed socio-demographic and economic profile for each sales representative.

In the first phase of deployment, the company established basic data mining capabilities to collect and create variables affecting client behaviour. SPSS Modeler was used to establish the significance of every variable selected inside the model, and was able to indicate if one variable or another improved the model’s result. In the second phase of deployment, SPSS Modeler enabled the company to simultaneously model both internal and external data; this provides insight into the likely demand patterns for pharmacies in different locations, while identifying potential markets by product type.

The benefits

  • Triggered 37 percent average growth in sales per pharmacy in the first year following solution implementation, as a result of better decision-making based on the predictive analytics capability of SPSS Modeler.
  • Reduced the administrative workload of Laboratorios Indas’ sales representatives by simplifying the process of submitting client information on the fly from five minutes to 25 seconds per client.
  • Enabled sales representatives to promote products tailored to the clientele of each pharmacy, as a result of using predictive models to analyse order history and identify accurate customer demographics at each pharmacy location.
  • Increased the number of products sold on each sales visit by using the SPSS Modeler statistical analysis capability to systematically optimise sales visits to identify and target pharmacies that offered the most sales potential.
  • Strengthened loyalty among the pharmacy client base by offering more responsive service, which also tempted new pharmacies away from competing suppliers, resulting in more new business.
  • Enabled the market research team to create predictive models by using SPSS Modeler, facilitating the development of on and offline marketing campaigns directed towards particular client profiles.

Roberto García concludes: “Our new analytical capabilities have revolutionised our marketing research process. We now have a far greater understanding of our existing and prospective clients, which gives us a tremendous edge over our competitors.”

About IBM Business Analytics
IBM Business Analytics software delivers complete, consistent and accurate information that decision-makers trust to improve business performance. A comprehensive portfolio of business intelligence, predictive analytics, financial performance and strategy management, and analytic applications provides clear, immediate and actionable insights into current performance and the ability to predict future outcomes.

Combined with rich industry solutions, proven practices and professional services, organisations of every size can drive the highest productivity, confidently automate decisions and deliver better results.

As part of this portfolio, IBM SPSS Predictive Analytics software helps organisations predict future events and proactively act upon that insight to drive better business outcomes. Commercial, government and academic customers worldwide rely on IBM SPSS technology as a competitive advantage in attracting, retaining and growing customers, while reducing fraud and mitigating risk. By incorporating IBM SPSS software into their daily operations, organisations become predictive enterprises – able to direct and automate decisions to meet business goals and achieve measurable competitive advantage.

Products and services used

IBM products and services that were used in this case study.

Software:
SPSS Modeler

Legal Information

© Copyright IBM Corporation 2011. IBM España S.A.,Santa Hortensia, 26-2828002 Madrid Produced in Spain, May 2011. All Rights Reserved. IBM, the IBM logo and ibm.com are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. A current list of other IBM trademarks is available on the Web at “Copyright and trademark information” at: ibm.com/legal/copytrade.shtml. References in this publication to IBM products, programs or services do not imply that IBM intends to make these available in all countries in which IBM operates. Any reference to an IBM product, program or service is not intended to imply that only IBM’s product, program or service may be used. Any functionally equivalent product, program or service may be used instead. All customer examples cited represent how some customers have used IBM products and the results they may have achieved. Actual environmental costs and performance characteristics will vary depending on individual customer configurations and conditions. IBM hardware products are manufactured from new parts, or new and used parts. In some cases, the hardware product may not be new and may have been previously installed. Regardless, IBM warranty terms apply. This publication is for general guidance only. Photographs may show design models.